The wrong predisposition to think about digital transformation
The Harvard Business Review published last week a report entitled ‘Competing in 2020: Winners and Losers of the Digital Economy’. It offers great insight on several topics, such as the sectors where the urgency of the digital transformation is most felt. The survey conducted for the report shows that manufacturing (27%), government (36%), healthcare (36%) and retail (41%) are the industries that feel the least that digital trends will disrupt their sectors. Equally interesting, the survey shows that 67% of respondents feel that digital will allow for a greater value chain integration. This is a very interesting figure, because the digital transformation indeed compels companies to think more collectively, i.e within their ecosystem, than before. That is a fact that applies across all sectors.
Yet, the report is flawed in two respects. First, it takes a worldwide approach. The 783 respondents come from four different continents. Yet, the digital maturity is very different from one region to another. The challenges digital trends present to companies may be similar, but bringing them all under a single umbrella gives a false picture.
Second, and more importantly, respondents are divided in three categories: “digital” (most products/operations depend on digital technologies), “hybrid” (some products/operations depend on digital technologies), “non-digital” (few if any products/operations depend on digital technologies). I leave it to you to see how companies rank.
My issue with this classification is that it bases digital transformation on digital technologies. Yet, it has been pointed out numerous times in other studies that digital transformation is not about technologies — they are just a means to an end. While I understand the virtue of profiling companies, I find this report’s profiling too simplistic. It reinforces the illusion that selling online and using digital collaborative tools makes you fit for the digital economy.
In fairness, the report touches on essential aspects, such as the need to rethink your strategy, redesign your organisation and culture. Yet, it would have been a lot more valuable to angle the report around these aspects, which are critical for any company to adequately take on the digital wave. If these considerations is tackled as side-projects to investing in digital technologies or even after having done those investments, chances are you may be “digital” according to the report, but troubles loom ahead for the future of your company.
I first published this on LinkedIn.